Visa Hopes to Accelerate Mobile Payments With Monitise Alliance

Visa (San Francisco) has further strengthened its presence in the mobile financial services space by entering into an alliance with London-based mobile FS provider Monitise.

With the new partnership, Visa hopes to gain from the development expertise of Monitise, which already has relationships with financial institutions, mobile carriers and handset developers worldwide. Visa plans to tap into Monitise's customized development model to tailor fit mobile solutions for various markets and handsets. Through detection of phone make, model, screen size, browser type and multimedia capabilities, Monitise can optimize the user experience for Visa mobile payments and related services, according to a release.

Pam Zuercher, global head for mobile initiatives with Visa, tells BS&T that the alliance will help accelerate the payment giant's efforts to develop and deliver its suite of mobile financial services to the market.

Zuercher divides Visa's mobile strategy into four quadrants: payments, both contactless and remote; mobile money transfer, such as p2p funds transfers using the Visa network; acceptance, where the handheld is used to facilitate payments for services; and value added applications, such as transaction alerts on customers' card accounts, and mobile offers or coupons.

By teaming up with companies like Monitise, Zuercher says Visa can ensure its end users and clients that the broadest array of its mobile services will be available to them. Therefore, this particular announcement will be one of a continuing string of partnerships Visa hopes to foster in the mobile space going forward.

"Our solutions must work with a range of players in the marketplace so any Visa customer can use them," she explains. "Monitise will help us deliver our services to the broader mobile ecosystem."

In addition to the working relationship, Visa also announced plans to take a minority equity stake in Monitise, which is subject to shareholder approval. "[This investment] reflects our belief that Monitise has the potential to strengthen its offering to Visa and its partners," Zuercher comments.

Nick Holland, a senior analyst with Boston-based Aite Group, commented in a statement, "The investment by Visa in Monitise is a further indicator that mobile financial services are going to be A) mainstream and B) significant revenue generators. Over the last 18 months, big hitters such as Qualcomm, Nokia and Sybase have made investments in or outright purchased companies developing services around mobile banking and payments. Visa's recent investment is yet more evidence that the future of financial services will be mobile."

Zuercher is optimistic that Visa's bank partners will be pleased with the move. "The partnership represents an accelerated delivery of mobile payment and services to banks, which can, in turn, offer these services to their customers," she says.

This news comes on the heels of several other mobile-related announcements—some from just this past month alone—in which the company is expanding its presence in the mobile space and further commercializing its services. Although more movement has been made outside the U.S. around mobile payments—such as NFC payments in Malaysia and remote payments in Peru—there are some Visa initiatives that have gone live or are in pilot in this country as well.

For instance, it is engaged in a test of its mobile money transfer services in North America, with Minneapolis-based U.S. Bank as the lead financial institution. It has also commercialized its value added applications (alerts and mobile offers) on mobile phones that use the Google Android operating system.

"We see consumers worldwide and in the U.S. are looking to their mobile phones to do more," Zuercher says. "We are looking to further expand our services in the U.S. It has never been about the plastic card for us, but about accessing the account number associated with it. Our job is that if consumers want to access their accounts via mobile phone, then we must provide them with the channel they desire."